Study: Slight spike in insurance premiums

Published 12:13 am, Saturday, August 24, 2013

Americans are paying about 80 percent more for employee-sponsored health coverage than they did 10 years ago, but only slightly more than they paid last year, according to a new study from the Kaiser Family Foundation.

The slowdown in the increase of insurance premiums is not entirely something to cheer about. It is, in part, a result of a sluggish economy that has caused people cut down on doctor visits.

The report, released this week, show that the average annual premiums for employer-sponsored health insurance in 2013 are $5,884 for single coverage and $16,351 for family coverage. Those numbers represented a relatively small increase from last year -- 5 percent for single coverage and 4 percent for family coverage -- but an increase of roughly 80 percent from 10 years ago. The report shows that premiums are increasing about three times as fast as wages and inflation, said Kaiser President and CEO Drew Altman.

"It certainly was not surprising to us (at Kaiser) or to me," Altman said of the slowdown,which he attributed to the overall economy. He said it represents a turn around from the "startling double digit increases" from a few years ago.

More Information

Premiums at a glanceHere are some key facts from the Employer Health Benefits survey, conducted by the Kaiser Family Foundation and the Health Research and Educational Trust.In 2013, the average annual premium for individual coverage under an employer-sponsored health plan was $5,884. That's a 5 percent increase from 2012's average.The average annual premium for family coverage was $16,351. That's a 4 percent increase from 2012.Covered workers contribute, on average, 18 percent of premium costs for single coverage, and 29 percent of the premium for family coverage. The survey says that percentage covered by workers is consistent with previous years.Between 2012 and 2013, workers' wages increased by 1.8 percent and inflation increased by 1.1 percent.

In Connecticut, Jim Lambert, of First Choice Consulting in Milford, said the Kaiser numbers are consistent with what he saw happening to insurance rates in the state over the past few years. Lambert's firm specializes in college planning and Medicare counseling. He also sells insurance, and agreed increases have been moderate.

"It wasn't that big an increase," he said. "If someone told me it was 4 to 5 percent, that sounds about right."

But one expert said it's tough to compare whether the state's premiums are rising at a rate consistent with what Kaiser is reporting.

"We've obviously seen rates increase in Connecticut over the past 10 years," said Jennifer Herz, assistant counsel for the Connecticut Business and Industry Association. However, she said, it's hard to compare numbers, because so many variables change from year to year, including what plans are required to cover.

"It's like comparing apples to oranges," she said.

This is the 15th year that Kaiser, a nonprofit foundation based in Menlo Park, Calif., has conducted the survey, along with another non-profit, the Health Research and Educational Trust. Researchers polled more than 2,000 small and large employers about whether they offer coverage, what premiums are, how much employees contribute and other insurance-related questions. This year's survey found, among other things, that workers contribute about 18 percent of the premium for single coverage and 29 percent of the premium for family coverage. Those percentages are similar to those from last year, and have changed little over the past decade.

In dollar amounts, employee contributions range from $862 to $1,065 for coverage of an individual, depending on the size of the employer. For family plans, employee contributions range from $4,226 to $5,284.

Employees of a small firm -- with between three and 199 workers -- were likely pay less for single coverage than employees of a larger firm. However, those who worked for larger firms were likely to pay less for the family plan.

The study also found that 57 percent of firms offer health benefits to their workers, only a slight dip from 61 percent in 2012 and 60 percent in 2011.

Though the fairly moderate increases are expected to continue for at least some time longer, Altman said the future is tricky to predict. Many factors need to be taken into account, including what role the Affordable Care Act might play moving forward.

"No one knows for sure," he said. "If they say they do, they don't. A lot will depend on what the economic growth is moving forward."